Multi-tier pricing of individual products based on volume discounts

ABSTRACT

A point of sale system or other computer system stores a product pricing database in which a full price and discount prices corresponding to one or more discount pricing tiers are stored for each product available for sale. Each of the discount prices for a given product has an associated threshold purchase total that has to be satisfied before the discount price is applied to a transaction. When a transaction occurs, the purchase total for the transaction is first calculated on the basis of full retail prices for the products and the purchase total for the transaction is compared with one or more threshold purchase totals which correspond to the discount pricing tiers. If a discount pricing tier is applicable (e.g. the calculated purchase total for the transaction is at least equal to a threshold purchase total), the appropriate discount prices for each product in the transaction are retrieved and used to calculate a reduced purchase total for the transaction. Qualification for discount pricing can also be based on, for example, a customer&#39;s purchasing history, or the number of a certain type of product included in the transaction instead of the purchase total of a transaction.

CROSS-REFERENCE TO RELATED APPLICATIONS

The following co-pending, commonly-owned, U.S. patent applications arerelated to the present application: U.S. patent application Ser. No.09/166,267, entitled “METHOD AND APPARATUS FOR DETERMINING A PROGRESSIVEDISCOUNT FOR A CUSTOMER BASED ON THE FREQUENCY OF THE CUSTOMER'STRANSACTIONS”, filed on Oct. 5, 1998; and U.S. patent application Ser.No. 09/118,414, entitled “POINT-OF-SALE SYSTEM AND METHOD FOR THEMANAGEMENT OF GROUP REWARDS”, filed on Jul. 17, 1998.

FIELD OF THE INVENTION

The method and apparatus of the present invention relate to calculatingdiscounted prices for products sold at retail.

BACKGROUND

It is a common practice for retail sellers to discount the prices ofproducts in order to attract customers and increase sales volume. Onevery widespread method of discounting involves issuance of coupons. Onetype of coupon may be presented by the buyer when a particular productis purchased, in order to obtain a reduced price for the product.Another type of coupon may be presented to obtain X dollars off or Xpercent off a total purchase of Y dollars.

It is also common to extend discounts of the latter kind without issuingor requiring presentation of a coupon. For example, retailers frequentlyadvertise special sales of X per cent off all purchases made on a givenday or all purchases made on that day of over a given amount.

Another well-known promotional approach invites the customer to “buyone, and get one free”. Alternatively and as an inducement to purchaselarger quantities of products, discount prices are offered for thepurchase of increased quantities of products (commonly referred to as“bulk discounts”), as in “one for 50¢, three for $1”.

Other discount plans are available only to customers who are “members”of the plan. These include membership club “superstores” that offerdiscounted prices on all products sold but are not open to the generalpublic. Other stores (particularly supermarkets) are open to all butissue preferred customer cards that entitle the holder to discounts onsome or all products in the store.

Most, if not all, of these discounting approaches have somedisadvantages. For example, coupons or other promotions which apply onlyto a certain product or products will do little to attract customers whoare not interested in purchasing those products. On the other hand,across-the-board discount offers may be disadvantageous to the retailer,since some customers may concentrate their purchases on products whichcarry a low profit margin. When this occurs, the retailer may find thatadditional revenues generated by the promotion do not translate intomuch, if any, additional profit. One way in which retailers haveattempted to deal with this problem is by excluding low-margin productsfrom sales of the “take 10% off everything” type.

In a somewhat similar known approach, it is known in the supermarketenvironment to grant a discount of 10% off a group of products if thetotal purchase amount spent by a customer on a visit to the store is atleast $20. If the total purchase amount is at least $50, then a 20%discount is applied to products purchased from the qualified group ofproducts.

None of the known discounting and promotional techniques has fullyaddressed the need to balance the attractive features of discountingwith preservation of profit margins on the products to be sold.

SUMMARY OF THE INVENTION

In a preferred embodiment, the present invention provides a method andapparatus for calculating a purchase total for a transaction, in which:(a) a number of product identifiers are received, each representing arespective product to be purchased, (b) an initial purchase total forthe transaction is calculated on the basis of a respective first pricefor each of the products to be purchased, (c) it is determined whetherthe initial purchase total is at least equal to a predeterminedthreshold purchase total, and (d) if such is the case, a reducedpurchase total is calculated for the transaction on the basis ofrespective second prices for each of the products to be purchased, whereat least some of the second prices are lower than the correspondingfirst prices. The first and second prices (and perhaps third and fourthor even more prices) are, in one embodiment, stored in a database andare retrieved as necessary to calculate the initial purchase total and adiscounted purchase total for which the transaction is qualified.

It is contemplated to apply the present invention in a variety ofdifferent types of retail stores, including supermarkets, drugstores andquick service restaurants. In such applications, a conventional point ofsale system is programmed to carry out the invention. A suitable pricingdatabase, including multiple prices for at least some of the productsavailable for sale, is stored in the point of sale system.

It is also contemplated to apply the present invention to otherretailing outlets including catalog-ordering facilities, and shoppingWeb sites maintained on the Internet.

The customer may be permitted to qualify for discounted prices on theproducts available for sale on the basis of a number of criteria,including a purchase total of a current purchase transaction, the sum ofpurchase totals over a predetermined period of time, membership in agroup that has maintained or reached a predetermined sum of purchasetotals or other level of purchases, purchasing of a predeterminedcombination of products, or purchasing a predetermined number ofqualifying products, such as a number of products which carry the samebrand.

The discounting methods and apparatus of the present invention permitthe seller to predetermine and store one or more levels of discountprices on a product-by-product basis. The seller may therefore be ableto carefully balance the reduction in profit margin for each productwith the overall level of spending made by the customer For example, thediscount prices of a given product may have a predefined relationshipwith the retail price of a the product. For example, the discount pricemay be set such that the difference between the retail price and thediscount price for a high margin product is substantially greater thanthe difference between the retail price and the discount price of a lowmargin product. As a result, the benefit received by the retailer ingenerating additional sales volume can be set to outweigh the reductionin profit margins resulting from the discounts.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 is a block diagram of a point of sale system in which the presentinvention is applied.

FIG. 2 is a block diagram showing some details of a point of saleterminal which is part of the system shown in FIG. 1.

FIG. 3 is a block diagram which shows some details of a central serverwhich is included in the system of FIG. 1 and has been programmed andloaded with database information in accordance with the invention.

FIG. 4A illustrates a prior art database in which the data is organizedaccording to a prior art data structure.

FIG. 4B illustrates the prior art database of FIG. 4A storingillustrative data.

FIG. 5A illustrates a database in which the data is organized accordingto a data structure in accordance with the present invention.

FIG. 5B illustrates the database of FIG. 5A storing illustrative data.

FIG. 6A illustrates a condition database in accordance with anembodiment of the present invention.

FIG. 6B illustrates a condition database in accordance with anotherembodiment of the present invention.

FIG. 6C illustrates a condition database in accordance with anotherembodiment of the present invention.

FIG. 7 illustrates a portion of the database of FIG. 5B and anillustrative display that indicates the various conditions of thecondition database of FIG. 6A.

FIG. 8 illustrates a simplified example of a price database stored inthe server of FIG. 3 in accordance with the invention.

FIG. 9A illustrates a database in which the data is organized accordingto a data structure in accordance with another embodiment of the presentinvention.

FIG. 9B illustrates the database of FIG. 9A storing illustrative data.

FIG. 9C illustrates similarly illustrates the database of FIG. 9Astoring illustrative data for three products.

FIG. 10A illustrates a database in which the data is organized accordingto a data structure in accordance with another embodiment of the presentinvention.

FIG. 10B illustrates the database of FIG. 10A storing illustrative data.

FIG. 10C illustrates a database that is substantially equivalent to thedatabase depicted in FIG. 10B.

FIG. 11A illustrates a database in which the data is organized accordingto a data structure in accordance with another embodiment of the presentinvention.

FIG. 11B illustrates the database of FIG. 11A storing illustrative data.

FIG. 12 is a flowchart which illustrates a process carried out, inaccordance with the invention, to calculate a purchase total for atransaction by using multi-tiered product discount pricing.

FIG. 13 is a flowchart which illustrates a process carried out accordingto an alternate embodiment of the invention, in which a customerqualifies for a discount pricing tier by purchasing a particular numberof qualifying products.

FIG. 14 is a flowchart which illustrates a process carried out accordingto another alternate embodiment, in which product pricing is calculatedon the basis of price decrements and increments in the purchase total ofa transaction.

FIG. 15 illustrates an example of a record of a transaction databasewhich is stored in a point of sale system according to an alternateembodiment of the invention.

FIG. 16A illustrates an example of a customer database which is storedin a point of sale system in accordance with an alternate embodiment ofthe invention.

FIG. 16B illustrates another example of a customer database storedaccording to an alternate embodiment of the invention.

FIGS. 17A and 17B are respectively illustrations of a team database anda customer database stored in a point of sale system according to stillanother alternate embodiment of the invention.

FIG. 18 is a flowchart which illustrates a process for calculatingpurchase totals in a multi-tier product pricing system which is based ona customer's purchasing history, as provided according to anotheralternate embodiment of the invention.

FIG. 19 is a flowchart which illustrates a process, provided inaccordance with an alternate embodiment of the invention, for updatingcustomers' purchasing histories.

FIG. 20 is a flowchart which illustrates a process, provided accordingto another embodiment of the invention, which includes both calculatingpurchase totals according to a customer's purchasing history, andupdating the customer's purchasing history.

FIG. 21 illustrates information which may be displayed on a displayscreen of a point of sale terminal in a quick service restaurant toadvise the customer how to qualify for a discount pricing tier.

FIG. 22 schematically illustrates an arrangement of equipment that maybe employed for shopping over the Internet, and in which an alternateembodiment of the invention is applied.

FIG. 23 is a flowchart which illustrates a process carried out inaccordance with the invention in which a customer who is shopping viathe Internet is provided with information concerning how to qualify fordiscount product pricing.

FIGS. 24 is an illustration of a display provided to the customer inaccordance with the process of FIG. 19.

FIG. 25 is a schematic illustration of a catalog order-taking facilityin which an embodiment of the present application is applied.

FIG. 26 is a flowchart which illustrates a process by which anembodiment of the present invention is applied in thecatalog-order-taking facility of FIG. 21.

DETAILED DESCRIPTION OF THE INVENTION

Definitions

The following terms, as used herein, shall have the meanings indicatedbelow access attempt: an attempt by a client computer to access a Website hosted by a Web server computer.

average transaction value: an amount calculated by dividing a totaldollar value of transactions during a period of time by the number ofsuch transactions.

catalog order-taking facility: a facility at which telephone calls arereceived from customers and orders for merchandise are entered into acomputerized order-processing system in response to customers' telephonecalls.

client computer: a computer used by a customer to purchase products viathe Internet.

corresponding first price: as to each second price, the “correspondingfirst price”, as used in the appended claims, means the first price forthe same product of merchandise.

customer service station: a computer terminal, personal computer,network computer or computer workstation connected to a computerizedorder-processing system at a catalog order-taking facility and used toenter orders for merchandise into the computerized order-processingsystem.

Internet: a matrix of computer networks that connects computers aroundthe world.

monitor component: a video monitor, display, cathode ray tube, flatpanel display, or other device connected to a computer or other userdevice (e.g. a pager or personal digital assistant) and used to displayinformation to a user of the computer or other user device.

pricing qualification level: a dollar amount of purchases or combinationof products which entitles a customer to discounted pricing.

product identifier: data that uniquely identifies a product and thatindicates selection of a product to be purchased.

retail price: a price charged for a product when no discounted priceapplies.

retail outlet: a retail store, shopping Web site, catalog order-takingfacility or other facility that offers products for customers topurchase.

transaction: an event in which a customer purchases one or more productsfrom a seller.

Web server computer: a computer which hosts a shopping Web site.

product: a good or service that a customer may obtain from a retailoutlet.

An embodiment of the invention will now be described with reference toFIGS. 1-3, 4A and 5-8.

Referring initially to FIG. 1, reference numeral 50 generally indicatesa point of sale system in which a first embodiment of the invention isapplied. It is preferred that the hardware making up the point of salesystem 50 be of conventional design. The present embodiment will bedescribed in the context of a retail outlet such as a supermarket, andthe point of sale system may, for example, be constituted in terms ofits hardware by point-of-sale terminal equipment and an associated datanetwork of the type typically employed in a supermarket. As somewhatschematically illustrated in FIG. 1, the point of sale system 50 isshown as including point of sale (POS) terminals 52 and a central serverunit 54 connected by data paths 56 to the POS terminals 52. Althoughonly three POS terminals 52 are shown in FIG. 1, it will be recognizedthat in many cases a greater number of such terminals 52 will beinstalled in a retail store and connected to the central server 54. Ofcourse, it is also contemplated to apply the invention in a point ofsale system having fewer than three terminals.

FIG. 2 is a block diagram which shows some details of a typical one ofthe POS terminals 52.

The POS terminal 52 includes a processor 58 which controls operation ofthe POS terminal 52. The processor 58 may be one or more conventionalmicroprocessors or micro-controllers. Other conventional components ofthe POS terminal 52, all of which are connected to the processor 58,include a printer 60 for printing, for example, sales receipts andcredit card slips, one or more data input devices 62, such as, forexample, a keyboard and a bar code reader, and a character and/or C RTdisplay 64 which provides an indication, such as a visual indication, ofproduct or other data inputted into, or being processed by, the POSterminal 52. Also connected to the processor 58 is a communicationsinterface component 66 through which the processor 58 exchanges datawith the central server 54.

Another component of the POS terminal 52 shown in FIG. 2 is a datamemory device 68 which is accessible by the processor 58. A program 70is stored in the data memory device 68. The program 70 controls theprocessor 58 to carry out functions of the present invention which willbe described below.

Referring now to FIG. 3, some details of the central server 54 of FIG. 1will now be described.

The central server 54 includes, and is controlled by, a processor 72.Processor 72 may comprise as one or more processors, such as one or morePentium® microprocessors. If the processor comprises a plurality ofmicroprocessors, the plurality of microprocessors may or may not operatein parallel. Connected to the processor 72 are conventional componentssuch as an input device 74, a display device 76, a printer 78 and acommunication interface 80. As is customary, the central server 54 ispreferably 10 realized using suitable personal computer, computerworkstation or mini-computer hardware. The peripheral devices 74, 76 and78 may comprise, for example, a keyboard/mouse, a computer monitor and acomputer output printer, respectively. The communication interface 80allows the processor 72 to exchange data with the POS terminals 52 viathe data links 56 (FIGS. 1 and 2).

Continuing to refer to FIG. 3, the central server 54 also includes adata memory device 82, which is accessible by the processor 72 andpreferably is a mass storage device such as a hard disk drive. Theprocessor 72 is in communication with the data memory device 82. Thedata memory device 82 comprises an appropriate combination of magnetic,optical and/or semiconductor memory, and may include Random Access 20Memory (RAM), Read-Only Memory (ROM) and/or a hard disk. The processor72 and the memory device 82 may each be (i) located entirely within asingle computer or other computing device; (ii) connected to each otherby a remote communication medium, such as a serial port cable, telephoneline or radio frequency transceiver; or (iii) a combination thereof. Inone embodiment, the central server 54 may comprise one or more computersthat are connected to a remote server computer for maintainingdatabases.

The data memory device 82 stores a program 84 for controlling theprocessor 72. The processor 72 performs instructions of the program 84,and thereby operates in accordance with the present invention, andparticularly in accordance with the methods described in detail herein.The program 84 may be stored in a compressed, uncompiled and/orencrypted format. The program 84 furthermore includes program elementsthat may be necessary, such as an operating system, a databasemanagement system and “device drivers” for allowing the processor 72 tointerface with computer peripheral devices. Appropriate device driversand other necessary program elements are known to those skilled in theart, and need not be described in detail herein.

The storage device 82 also stores (i) a price database 86, (ii) acondition database 88, (iii) a transaction database 90, (iv) a customerdatabase 92, and(v) a team database 94. The databases 86, 88, 90, 92,and 94 are described in detail below and depicted with exemplary entriesin the accompanying figures. As will be understood by those skilled inthe art, the schematic illustrations and accompanying descriptions ofthe databases presented herein are exemplary arrangements for storedrepresentations of information. A number of other arrangements may beemployed besides those suggested by the databases shown. Similarly, theillustrated entries of the databases represent exemplary information,and those skilled in the art will understand that the number and contentof the entries can be different from those illustrated herein.

The price database 86 includes pricing information for products to besold in the store. The condition database 88 indicates conditions thathave to be met to qualify for discount pricing tiers. The transactiondatabase 90 stores information concerning purchase transactions carriedout at the POS terminals. The customer database 92 stores informationsuch as purchasing histories for customers of the store. The teamdatabase 94 stores data indicating “purchasing teams” (e.g. severalcustomers associated together via the record in the customer database)with which store customers maybe affiliated.

FIG. 4A is a table 4000 which depicts a prior art database in which thedata is organized according to a prior art data structure. The datastructure includes a product identifier data object 4001 and a pricedata object 4002 for the product identifier data object. The productidentifier uniquely identifies a product and the price indicates theprice to pay for that product.

FIG. 4B depicts the prior art table 4000 of FIG. 4A storing illustrativedata. Each of records 4010, 4020 and 4030 specifies a product and itsprice. Typically, in a conventional retail system, the POS terminalretrieves the price associated with a product, based on a productidentifier, from table such as table 4000 and applies the retrievedprice for the product to the current transaction.

FIG. 5A depicts a database in which the data is organized according to adata structure in accordance with the present invention. In oneembodiment, such data is stored on a computer readable medium and isaccessible by a program executed on a data processing system, alsodescribed herein.

The data structure includes a product identifier data object 5052 and aplurality of price data objects 5054, 5056, 5058 and 5060 for theproduct identifier data object 5052. The product identifier uniquelyidentifies a product and each price indicates the price to pay for thatproduct under a particular condition. A condition table 5000 includes arespective condition data object 5002, 5004, 5006, and 5008 for eachprice data object 5054, 5056, 5058, and 5060. For example, conditiondata object 5002 corresponds to price data object 5054. When a conditionis satisfied, the satisfied condition indicates one price which is to bepaid for the product.

FIG. 5B depicts the database of FIG. 5A storing illustrative data. Theproduct “P135” identified by reference numeral 5052 has four associatedprices “$2.99” (5054), “$2.95” (5056), “$2.90”(5058) and “$2.75” (5060).The condition table 5000 includes condition data objects, 5002, 5004,5006 and 5008 for the price data objects 5052, 5054, 5056 and 5058respectively. The illustrative condition data objects 5002, 5004, 5006and 5008 define conditions in terms of a value, and in particular interms of ranges of the value. The value may be, for example, thepurchase total of a single transaction, the purchase total of aplurality of transactions, or the average purchase total of a pluralityof transactions. For illustrative purposes, FIG. 5B illustrates theconditions in terms of a purchase total (PT) value range. For example,FIG. 5B illustrates that the price of “$2.99” (5054) for product “P135”(5052) has an associated purchase total value range of $0 through $100.Thus, if a purchase total of a transaction is a value greater than $0and less than $75, the price applied to the transaction for the product“P135” included in such a transaction is $2.99. If however, the purchasetotal of a transaction is a value greater than $75 and not greater than$100, then the price for the product “P135” as applied to such atransaction is $2.95, as indicated by the condition value range 5004 andthe corresponding price data object 5056.

The condition data objects may define mutually exclusive conditions. Forexample, if the condition data objects define conditions in terms ofranges of a value, the ranges may be mutually exclusive (i.e.non-overlapping). Similarly, the condition data objects may defineexhaustive conditions such that under any conditions at least onecondition is always satisfied. Thus, if the condition data objectsdefine both mutually exclusive conditions and exhaustive conditions,then under any conditions exactly one condition is satisfied.

FIG. 6A is a condition table 6000, which illustrates an embodiment ofthe condition database 88 of the central controller of FIG. 3, inaccordance with another embodiment of the present invention. Thecondition table 6000 includes a plurality of records 6001, 6002, and6003, each record specifying a pricing tier name 6005 and a condition6010 that corresponds to that pricing tier name. The condition table6000 defines conditions in terms of a value, and in particular in termsof ranges of the value. Each range is defined by a value and thevalue(s) of other record(s). In FIG. 6A, this value is the purchasetotal threshold. For example, the record 6001 specifies a pricing tiernamed “GOLD” and a value “$150”. The record 6002 specifies a pricingtier named “SILVER” and a value “$100”. The record 6001 thus defines arange “greater than $150”, and the record 6002 defines a range “between$100 and $150”.

FIG. 6B is a condition table 6020, which illustrates an embodiment ofthe condition database 88 of the central controller of FIG. 3, inaccordance with another embodiment of the present invention. Thecondition table 6020 is similar to the condition table 6000 of FIG. 6A,and likewise includes a plurality of records 6021, 6022, 20 6023, and6024, each record specifying a pricing tier name 6025 and a condition6030. However, the condition table 6020 defines conditions in terms ofexplicit ranges of a value within each record 6021, 6022, 6023, and6024. For example, record 6022 defines the purchase total (PT) range forthe “Silver” pricing tier as a value not less than $100 and less than$150.

FIG. 6C is a condition table 6050, illustrative of the conditiondatabase 88 of the central controller 54(FIG. 3), in accordance withanother embodiment of the present invention. The condition table 6050 issimilar to the condition table 6000 of FIG. 6A, and likewise includes aplurality of records 6051, 6052, 6053, and 6054, each record specifyinga pricing tier name 6055 and a condition 6060 that corresponds to each30 respective pricing tier name. However, in FIG. 6C the condition table6050 defines conditions in terms of a number of “qualifying” productsthat are purchased, rather than in terms of a purchase total.

FIG. 7 is a portion 7000 of the database of FIG. 5B for ease ofillustration. The illustrative portion 7000 is of the type that may bepresented to a customer on a shelf label to inform the customer of thepossible prices for a product. In a preferred embodiment of theinvention, prices corresponding to three discount tiers, in addition tothe retail price, are assigned to many or all of the products sold inthe store, and shelf labels in the format shown in the illustrativeportion 7000 are displayed on store shelves adjacent to all of theproducts to which the discount prices have been assigned. FIG. 7 alsodepicts an illustrative display 7050 that indicates the variousconditions of the condition table 6A. The illustrative display 7050 isof the type that may be presented to a customer to inform the customerof the conditions, which in the present example are based on thepurchase total. It is contemplated that, in one embodiment of thepresent invention, the illustrative display 7050 and/or the illustrativeportion 7000 may be in digital format and the pricing tier thresholdpurchase totals and corresponding product prices are changed dynamicallybased on current sales volume or other conditions.

FIG. 8 is a table 8000 which is illustrative of one embodiment of theprice database 86 of the central controller 54 (FIG. 3). The table 8000is similar to the portion 7000 of FIG. 7, yet specifies a plurality ofproducts. In an embodiment such as illustrated in FIG. 8, each conditioncorresponds to a respective subset of the prices. Each respective 20subset of prices includes one respective price for each of the productidentifiers. In addition, for any product, each price corresponds to onerespective condition. For example, the condition “GOLD PRICE”corresponds to a subset of prices that includes the first price of eachof the product identifiers. The product identified by “P101” has fourprices, each corresponding to one of the respective conditions “GOLDPRICE”, “SILVER PRICE”, “BRONZE PRICE” and “RETAIL PRICE”.

Table 8000 includes a number of records 8001, 8002, 8003, 8004, 8005each of which has six attributes, corresponding to the six columns showntable 8000. The six columns respectively are indicated in table 8000 asdenoting the “product identifier” (reference numeral 8010), which may bean alphanumeric string of digits that uniquely 30 identify the productin question; the product description (reference numeral 8020); pricescorresponding to a “gold” discount pricing tier (reference numeral8030), which, in the illustrated embodiment, are the most favorableprices from the customer's point of view; prices corresponding to a“silver” pricing tier (reference numeral 8040), which, in theillustrated embodiment, is a tier that is less favorable than the goldtier; prices corresponding to a “bronze” discount pricing tier(reference numeral 8050), which, in the illustrated embodiment, is atier of prices that is less favorable than the silver tier, and theretail pricing tier (reference numeral 8060) which represent the pricesat which products are sold when no discount is applicable. In theexamples provided in table 8000, the bronze price for each product islower than the retail price, the silver price for each product is lowerthan the bronze price, and the gold price for each product is lower thanthe silver price; except that for one product, “P105”, granola Cereal,the pricing in all four tiers is the same. Of course it is understoodthat any number and hierarchical order of pricing tiers could be used inaccordance with the present invention.

The example of FIG. 8 illustrates the great flexibility in varying thepricing from tier to tier and varying the discount structure fromproduct to product that is a key advantage of the present invention. Forexample, if the information for one of the products other than “granolacereal” is examined, it will be noted that the decrease in price fromone tier to the other is variable. For instance, in the case of product“P101”, “cream cheese”, the reduction in price in the bronze tierrelative to the retail pricing tier is 5¢, whereas the decrease in thesilver discount pricing tier as compared to the bronze discount pricingtier is 10¢, and the reduction in price from the silver discount pricingtier to the gold discount pricing tier is 15¢.

It will also be observed that looking across all of the products, thechanges in price from one tier to another tier need not be uniformacross the different products. For example, the reduction in price fromthe silver discount pricing tier to the gold discount pricing tier forcream cheese is just under 10%, the reduction in price for orange juicebetween the two discount pricing tiers is just under 5%, but thereduction in price for rye bread is in excess of 20%.

FIG. 9A illustrates a database in which the data is organized accordingto a data structure in accordance with another embodiment of the presentinvention. The data structure includes a product identifier data object9002 and a plurality of price data objects 9004, 9006, and 9008 for theproduct identifier data object. The product identifier uniquelyidentifies a product and each price indicates the price to pay for thatproduct under a particular condition. The product identifier data objectis also associated with its own condition table 9010, which includes arespective condition data object 9012, 9014, and 9016 for each pricedata object. When a condition is satisfied, the satisfied conditionindicates one price which is to be paid for the product.

In contrast to the embodiment presented in FIG. 5A, in the embodimentdepicted in FIG. 9A each product is associated with its own conditiontable. Accordingly, different products may have different conditionsunder which various prices are applicable, and different products mayhave different numbers of prices. In fact, the conditions of differentproducts may be defined in different terms. For example, a first productmay have prices based on the purchase total, while a second product hasprices based on a number of qualifying products that are purchased.

FIG. 9B illustrates the database of FIG. 9A storing illustrative dataThe product identified by reference numeral 9002 has four associatedprices $2.99 (9004), $2.95 (9006), and $2.90 (9008). The condition table9010 for the product includes condition data objects 9012, 9014, and9016 for the price data objects 9004, 9006, and 9008 respectively. Theillustrative condition data objects 9012, 9014, and 9016 defineconditions in terms of a value, and in particular in terms of ranges ofa purchase total. For example, the condition data object 9014 definesthe condition of a purchase total (PT) range of $75 to $100. Thus, ifthe condition of condition data object 9014 is met, the price indicatedby corresponding price data object 9006 is applied for product “P135.”That is, if a purchase total of a transaction is greater than $75 butnot greater than $100, the price applied to the transaction for product“P135” is $2.95.

FIG. 9C is table 1000 and similarly depicts the database of FIG. 9Astoring illustrative data for three products. The product identified byreference numeral 1010 has two associated prices 1012 and 1014. Thecondition table 1015 for the product 1010 includes condition dataobjects 1016 and 1018 for the price data objects 1012 and 1014respectively. The illustrative condition data objects 1016 and 1018define conditions in terms of ranges of a purchase total.

The product identified by reference numeral 1020 also has two associatedprices 1022 and 1024. The condition table 1025 for the product 1020includes condition data objects 1026 and 1028 for the price data objects1022 and 1024 respectively. The illustrative condition data objects 1026and 1028 also define conditions in terms of ranges of a purchase total.

The product identified by reference numeral 1030 has three associatedprices 1032, 1034 and 1036. The condition table 1037 for the product1030 includes condition data objects 1038, 1039 and 1040 for the pricedata objects 1032, 1034 and 1036 respectively. The illustrativecondition data objects 1038, 1039 and 1040 also define conditions interms of ranges of a purchase total.

FIG. 10A depicts a database in which the data is organized according toa data structure in accordance with another embodiment of the presentinvention. The data structure includes a product identifier data object1050 and data objects 1052, 1054 and 1056 that indirectly define pricedata objects for the product identifier data object. In particular, inthe illustrated embodiment the data objects 1052, 1054 and 1056 indicatea retail price, a price decrement and a minimum price respectively. Thedata objects 1052, 1054 and 1056 thus define a set of prices rangingfrom the retail price to the minimum price, each such price separated bythe magnitude of the price decrement.

The data structure also includes a condition table 1060 which includesdata objects 1062 and 1064. The data objects 1062 and 1064, whichindicate a purchase total threshold and a purchase total incrementrespectively, define ranges of the purchase total. The ranges start withthe range of purchase totals less than the purchase total threshold, andeach subsequent range spans the purchase total increment, except for thefinal range which spans the values not encompassed by the other ranges.

FIG. 10B illustrates the database of FIG. 10A storing illustrative data.The data structure includes product identifier data object 1050 and dataobjects 1052, 1054 and 1056 that indicate a retail price of $2.99, aprice decrement of $0.05 and a minimum price of $2.69 respectively. Thedata objects 1052, 1054 and 1056 thus define a set of prices rangingfrom the $2.99 to $2.69, each such price separated by $0.05.

The data structure also includes a condition table 1060 which includesdata objects 1062 and 1064. The data objects 1062 and 1064 indicate apurchase total threshold of $50.00 and a purchase total increment of$10.00 respectively. The ranges thus defined start with the range ofpurchase totals less than $50.00, and each subsequent range spans$10.00, except for the final range which spans the values notencompassed by the other ranges.

FIG. 10C illustrates a database that is substantially equivalent to thedatabase depicted in FIG. 10B. In particular, in the database of FIG.10C the data is arranged according to the data structure introduced inFIG. 5. The product identified by reference numeral 1070 has sevenassociated prices. The condition table 1080 likewise has sevenconditions, one for each of the seven prices. The prices range from$2.99 to $2.69, each such price separated by $0.05. The conditionsdefine ranges of purchase total, starting with the range of purchasetotals less than $50.00. Each subsequent range spans $10.00 (e.g.between $50 and $60), except for the final range which spans the valuesnot encompassed by the other ranges (i.e. purchase totals greater than$110). The data structure of FIG. 10B thus effectively “compresses” thedata of FIG. 10C. Accordingly, the data structure of FIG. 10B can bemore efficient in certain embodiments.

FIG. 11A illustrates a database in which the data is organized accordingto a data structure in accordance with another embodiment of the presentinvention. The data structure includes a product identifier data object1208 and a data object 1210 that indirectly defines price data objectsfor the product identifier data object.

The data structure also includes a condition table 1200 which includesdata objects 1202, 1204 and 1206. The data objects 1202, 1204 and 1206each define a function to operate on the data object 1210 of the productdata object 1208. Each of the data objects 1202, 1204 and 1206 thuscooperates with the data object 1210 to define one price for theproduct. The functions defined by the data objects 1202, 1204 and 1206may be any function of one or more variables. Similarly, the data object1210 store values for the one or more variables.

FIG. 11B illustrates the database of FIG. 11A storing illustrative data.The data structure includes a product identifier data object 1208 and adata object 1210 that defines a retail price of $15.00. This retailprice will indirectly define price data objects for the productidentifier data object 1208. The condition table 1200 includes dataobjects 1202, 1204 and 1206, which define the functions “100% of RetailPrice”, “90% of Retail Price” and “80% of Retail Price” respectively.Each of the data objects 1202, 1204 and 1206 thus cooperates with theretail price to define one price for the product. Specifically, the dataobjects 1202, 1204 and 1206 and the retail price define the prices$15.00, $13.50, and $12.00, respectively.

The following flowcharts are described as being carried out by either aPOS terminal or the central server 54. It is understood that where theprocess is described as being performed by a POS terminal it couldalternately be performed by the central server 54 and, similarly, wherea process is described as being performed by the central server it mayalternately be performed by a POS terminal. Also, each of the followingprocesses could be performed by a combination of the central server 54and one or more POS terminals. For example, some of the data could bereceived by a POS terminal and transmitted to the central server 54 orthe POS terminal could transmit a request to the central server based onthe received data; the central server 54 could perform an analysis onany transmitted data, retrieve more data from a database based on thetransmitted data or request; the central server 54 can then transmit theresults of the analysis or the additional data back to the POS terminalfrom which the original data or request had been received; and the POSterminal could apply the result or data to the current transaction. Forexample, the product identifiers of the products included in atransaction may be received by a POS terminal and transmitted to thecentral server 54. The central server 54 could then (i) calculate aninitial purchase total, (ii) determine which pricing tier is applicable,(iii) calculate a final purchase total based on the applicable pricingtier, and (iv) transmit the final purchase total (perhaps along with anindication of the pricing tier that was used to calculate it) to the POSterminal from which the product identifiers had been received. The POSterminal could then apply the final purchase total to the transaction.

FIG. 12 is a flowchart which illustrates a process carried out by thePOS terminal 52 (FIG. 2) under control of the program 70 for the purposeof implementing the present invention. Initially in the process of FIG.12, the product identifiers for the products to be purchased arereceived by the POS terminal (step 120). Typically, the productidentifiers are entered into the POS terminal by using a bar codescanner that is in communication with the POS terminal to read bar codeson the products. It is noted that machine readable indicia other thanbar codes may be utilized to identify products in accordance with theinvention. Of course, data identifying the products may also be enteredby manually entering the product identifier into the POS terminal usinga keyboard or by other known processes.

Next, at step 122, the POS terminal retrieves the “retail” (i.e.,non-discounted) prices for the products represented by the productidentifiers received at step 120. This pricing information is obtainedfrom the central server 54, and particularly from the price database 86shown in FIG. 3. The step 122 may comprise the POS terminal retrievingthe retail prices for the products once all of the product identifiersfor a given transaction have been received or the POS terminal mayretrieve the retail price for each product as the corresponding productidentifier is received. Then, at step 124, the POS terminal 52calculates an initial purchase total for the transaction by totaling theretail prices for the products that are being purchased in thetransaction.

Following step 124 is a decision block 126, at which it is determinedwhether the initial purchase total calculated at step 124 is at leastequal to the threshold purchase total which qualifies for gold tierpricing. In the example illustrated in FIG. 6A, the threshold purchasetotal for the gold pricing tier is $150, and if this amount is equaledor exceeded by the initial purchase total, then the gold tier prices foreach product in the transaction are retrieved from the price database,as indicated at step 128.

If at step 126 it was found that the initial purchase total does notequal or exceed the threshold purchase total for the gold discountpricing tier, then it is determined, at decision block 130, whether thethreshold purchase total for the silver discount pricing tier issatisfied. If so, the corresponding prices of the silver tier areretrieved from the price database for each product of the transaction(step 132). If it is found at step 130 that the threshold purchase totalfor the silver tier is not satisfied, then a decision block 134 followsblock 130. At block 134 it is determined whether the threshold purchasetotal for the bronze tier has been satisfied. If so, the bronze tierprice for each product of the transaction is retrieved from the pricedatabase (step 136).

Assuming that any one of the three threshold purchase total is satisfiedby the purchase total, then a step 138 is performed after the applicableone of steps 128, 132 and 136. At step 138 the purchase total isrecalculated using the appropriate prices retrieved at step 128, 132 or136, as the case may be. Essentially, the recalculation referred to atstep 138 consists of assigning the appropriate discount price to eachproduct of the transaction and totaling the discount prices. Althoughthe term “discount” was used in the preceding sentence, it will berecognized that in some cases the price for a product in one or more ofthe discount pricing tiers may be the same as the retail price for theproduct.

After step 138, the POS terminal takes whatever further actions may berequired to complete the transaction, as indicated at step 140. Forexample, the POS terminal may calculate a sales tax based on thetransaction total. In addition, as part of step 140 the POS terminal mayprint a receipt for the transaction, process a credit card payment, orcalculate change from an amount tendered.

It should also be noted that in the event that none of the discountpricing tier thresholds are met, step 140 is performed immediately afterstep 134. In the latter case, the initial purchase total for thetransaction, based on the retail prices for the products purchased, isused as the transaction total, and the activities carried on in step140, including calculation of sales tax and credit card paymentprocessing, etc., are based on non-discounted (i.e. retail) prices forthe products purchased.

The foregoing discussion of the process of FIG. 12 has not explicitlytaken into account the information which may be displayed on the displaydevice 64 (FIG. 2) of the POS terminal. The present inventioncontemplates that, during steps 120-124, information corresponding tothe products to be purchased and the retail prices therefor may bedisplayed in accordance with conventional practice as the productidentifier for each product is received and the corresponding retailprice retrieved. In addition, the initial purchase total may bedisplayed with an additional legend such as “total before any discountearned”. Then, if it is determined that one of the discount pricingtiers is applicable, the display device 64 may rapidly display asequence of the pertinent discount prices for each of the productspurchased as the relevant one of steps 128, 132 and 136 is performed.During step 138, the recalculated purchase total may be displayed with alegend such as “adjusted total based on gold prices” (or silver orbronze, as the case may be).

To summarize the process illustrated in FIG. 12, a first (retail ornon-discounted) price is retrieved for each product to be purchased, andis used to calculate an initial purchase total. If the purchase total isat least equal to a threshold purchase total which corresponds to adiscount pricing tier, then the respective prices from the discountpricing tier for each product to be purchased are retrieved. The pricesfrom the relevant discount pricing tier may be regarded as “second”prices for the products, and these second prices are totaled tocalculate a reduced purchase total for the transaction.

By using a technique of this type, which is based on one or morediscount prices assigned to products to be purchased, in addition to anon-discounted price, the retailer can precisely tailor its discountingplan to maximize the plan's effectiveness while reducing or eliminatingdiscounts on products which have a low profit margin.

According to one modification of the discount technique illustrated inFIG. 12, the reduced purchase total calculated at step 138 may becompared with the threshold for the discount pricing tier which wasapplied, and the discount pricing may be modified or reversed if thereduced purchase total fails to satisfy the threshold purchase total forthe corresponding discount pricing tier.

Another embodiment of the present invention contemplates that the formatof the shelf display shown in FIG. 6 may be modified to present thediscount pricing tiers in IS terms of “cents off” or “percent off”. Inparticular, for cream cheese, the gold price could be stated as“30¢off”; the silver price as “15¢ off”; and the bronze price as “5¢off”. (Of course, another phrasing such as “save 30¢” could also beused.)

It is also contemplated to change the format of the price database 86 sothat the discount prices for each product are defined in terms of anamount or percentage to be subtracted from the retail price.

In the embodiment of the invention which was described with reference toFIG. 12, the criterion used to determine whether discount pricing shouldbe applied was the initial purchase total of the transaction, ascalculated based on non-discounted prices.

FIG. 13 illustrates an alternate embodiment of the invention, in whichthe discount qualification criterion is the number of products of acertain type which are included in the transaction. For example,qualification for a discount may depend on the number of products of acertain brand, such as a store brand, which the customer purchases atone time. The POS terminal may determine which products are store brandproducts by, for example, the product identifier of the product (e.g.one or more digits of the product identifier identifies the product as astore brand product). According to a more specific example, for the“gold, silver, bronze” pricing scheme referred to above, purchase of 10store brand products would be required to qualify for the gold pricingtier, while purchase of 8 store brand products would be required for thesilver prices and 6 store brand products for the bronze prices.

The process of FIG. 13 begins with step 200, in which, as in step 120 ofFIG. 12, product identifiers are received for each product to bepurchased.

When the product identifiers for every product in the transaction havebeen received by the POS terminal, the total number of qualifyingproducts is determined (step 202). For example, the POS terminal cashiermay actuate a “total” button on the POS terminal to indicate that nomore product identifiers are to be received, which triggers the processof FIG. 13. In the example which was referred to above, it was assumedthat qualifying products were those which carry a store brand. On thebasis of the total number of store brand products included in thetransaction, a decision block 204 is carried out. The POS terminal maydetermine whether a product is a store brand product based on, forexample, the product identifier (e.g. one or more digits of the productidentifier could identify the product as a store brand product). Ofcourse, those skilled in the art of POS systems will recognize many waysof determining the number of store brand products included in atransaction. At block 204, it is determined whether the number of storebrand products included in the transaction is at least equal to thethreshold number of store brand products for the gold discount pricingtier. If so, the respective gold discount price for each product in thetransaction is retrieved, as indicated at step 206.

If at step 204 the number of qualifying (e.g. store brand) products isnot found to satisfy the threshold number of qualifying products for thegold discount pricing tier, then a decision block 208 follows block 204.At block 208 it is determined whether the number of qualifying productsis at least equal to the threshold number of qualifying products for thesilver discount pricing tier. If so, the respective prices from thesilver tier for each product of the transaction are retrieved, as isindicated by step 210.

If the determination at block 208 is that at least the threshold numberof qualifying products are not included in the transaction, a decisionblock 212 follows block 208. At decision block 212, it is determinedwhether the number of qualifying products is at least equal to thethreshold required to qualify for the bronze discount pricing tier. Ifsuch is the case, then the respective bronze discount pricing tier pricefor each product of the transaction is retrieved from the pricedatabase, as indicated at step 214.

If the determination at block 212 is in the negative, then the retailprices for each product in the transaction are retrieved, as indicatedat step 216. Following the applicable one of steps 206, 210, 214 and 216is a step 218, at which a final purchase total for the transaction iscalculated using the applicable prices which were retrieved for theproducts in the transaction. After step 218 other conventional processesrequired to complete the transaction are carried out, as indicated instep 220, and as previously discussed in connection with step 140 inFIG. 12.

In the process just described, it was assumed that if a qualifyingnumber of store brand products were purchased, then all products in thetransaction would be accorded discounted pricing from the appropriatediscount pricing tier. However, this process may be modified so that thediscounted prices are applied only to the qualifying productsthemselves, e.g., only to store brand products. If the embodiment ofFIG. 13 is modified in this manner, then retail prices would be appliedto all products which do not carry the store brand or otherwisenon-qualifying products.

An advantage of the embodiment of FIG. 13 is that the retailer ispermitted to use a flexible discounting plan to promote sales of certainproducts such as, for example, store brand products, perishableproducts, or high margin products.

A further embodiment of the invention will now be described withreference to FIG. 10A, 10B, and 10C. In this embodiment, instead ofdefining discount pricing tiers, with corresponding prices in each tierassigned to each product available for purchase, the price databasedefines the discounted prices in terms of decrements to be applied to aretail price of a given product. The decrements are applied on the basisof purchase total thresholds and purchase total increments, which may bevaried from product to product and tier to tier. The price decrementalso may vary from product to product and from tier to tier In onevariation of this embodiment, the price decrement for a given productmay increase as the purchase total increases. For example, the system ofthe invention could decrement the retail price of the product by 2¢ forevery $10 increment in the purchase total between a purchase totalthreshold of $50 and a purchase total of $100 and then decrement theretail price of the product by 5¢ for every subsequent $10 increment inthe purchase total.

FIG. 14 illustrates a process which corresponds to an embodiment of theinvention which utilizes the pricing format illustrated in FIGS. 10A,10B, and 10C.

The process of FIG. 14 begins with steps 300, 302 and 304, which areessentially the same as steps 120, 122 and 124 of FIG. 12. Torecapitulate these steps, product identifiers for each product to bepurchased in the transaction are received by the POS terminal (e.g. areinput into the POS terminal via a bar code scanner or keyboard by acashier operating the POS terminal), retail prices for each of theproducts corresponding to the received product identifiers are retrievedfrom the price database, and an initial purchase total for thetransaction is calculated using the retail prices.

Following step 304, the process of FIG. 14 enters a processing loopwhich is applied to each product in the transaction. In the first stepof the loop, which is step 306, the product identifier corresponding tothe next (the first product at the outset of the loop) product to beprocessed is selected from the products included in the transaction.Specifically, the purchase total threshold, the price decrement, thepurchase total increment and the minimum price for the product are allretrieved in step 308 (e.g. from a database such as illustrated in FIG.10B).

Following step 308 is a decision block 310. In decision block 310, it isdetermined whether the purchase total for the transaction, as calculatedat step 304, is at least equal to the “purchase total threshold” for thecurrently selected product identifier. If not, the retail price for theproduct is stored as the price to be applied to the current transactionfor the selected product. Then it is determined, at decision block 312,whether or not there are further products to be considered in connectionwith the transaction. If there are further products in the transaction,the process of FIG. 14 loops back to step 306.

It will next be assumed that, at step 310, it was determined that theinitial purchase total calculated at step 304 was at least equal to the“purchase total threshold” for the currently selected productidentifier. In that case, step 314 follows decision block 310. In step314 a discounted price for the product represented by the productidentifier is calculated according to the formula set forth below. Thisdiscounted price thus replaces the retail price for the product withinthe current transaction and is determined by the POS terminal to be theappropriate price for the product to be applied to the currenttransaction. Of course methods other than overriding the retail pricemay be recognized and utilized by one of ordinary skill in the art inproviding a calculated discounted price to the customer in accordancewith the invention. For example, the difference between the retail priceand the calculated discount price may be determined by the POS terminaland applied to the current transaction as a credit (i.e. deducted fromthe initial purchase total). An example formula of how to calculate adiscount price for a product in accordance with the invention follows:P _(D) =P _(R){(1+[(T−H)/I)×D}  (1)where:

-   -   P_(D)=the discounted price to be calculated at step 314;    -   P_(R)=the retail price for the product;    -   T=the initial purchase total calculated at step 304;    -   H=the purchase total threshold for the product;    -   I=the purchase total increment for the product;    -   D=the price decrement for the product; and        -   the square brackets ([ ]) denote the largest non-negative            integer that is less than the quantity within the square            brackets.

EXAMPLE A

To present an example of the above calculation, assume that the selectedproduct identifier is “P135” (using the data of FIGS. 10B and 10C forthis example) and the initial purchase total (T) calculated at step 304was $75.32. Then the formula set forth in equation (1) is applied, usingthe information presented for product P135 in FIGS. 10B and 10C, asfollows: $\begin{matrix}{P_{D} = {2.99 - \left\{ {\left( {1 + \left\lbrack {\left( {75.32 - 50.00} \right)/10.00} \right\rbrack} \right) \times 0.05} \right\}}} \\{= {2.99 - \left\{ {\left( {1 + \left\lbrack {25.32/10.00} \right\rbrack} \right) \times 0.05} \right\}}} \\{= {2.99 - \left\{ {\left( {1 + 2} \right) \times 0.05} \right\}}} \\{= 2.84}\end{matrix}$

Consequently, in this example the discounted price P_(D) calculated forthe product in step 314 is $2.84.

If the initial purchase total had been between $50.00 and $60.00, theformula of equation (1) would yield a discounted price P_(D) of $2.94for the product represented by product identifier P135 (in accordancewith the illustrative data of FIGS. 10B and 10C).

Following step 314, the discounted price calculated in that step iscompared with the minimum price for the product under consideration, asindicated at decision block 316. If the discounted price is less thanthe minimum price, then the price to be applied to the product is set tothe minimum price, as indicated by step 318. Otherwise the price to beapplied to the product is the discounted price calculated at step 314,as is indicated by step 320.

Following either step 318 or step 320, as the case may be, the processadvances to decision block 312, at which it is determined whether thereis another product in the transaction to be considered. If anotherproduct is included in the transaction that has not yet been processed,the process loops back to step 306. Otherwise, the process advances fromdecision block 312 to step 322, at which a final purchase total to beapplied to the transaction is calculated by substituting for the retailprice of each product any discounted price for the product that was setaccording to step 318 or step 320.

It will be noted that the discount technique illustrated in FIGS.10A-10C and FIG. 14 provides even greater flexibility than the techniqueexemplified by the process of FIG. 12. In the technique of FIGS. 10A-10Cand FIG. 14, there are four separate variables that may be adjusted foreach product. These are (i) qualifying threshold (“purchase totalthreshold”), (ii) price decrement, (iii) purchase total increment, and(iv) minimum price. With these four variables, the retailer has almostcomplete freedom to adjust the discounting plan according to theretailer's promotional goals, and the profitability of each product. Itis contemplated to modify the discounting technique illustrated in FIGS.10A-10C and FIG. 14 in a number of ways. For example, one or more of thefour variables can be made uniform among all of the products. As anothervariation, the formula applied at step 314 can be changed. The followingis an example of a formula that could be applied instead of the formulaof equation (1):P _(D) =P _(R)−[(T−H)/I]×D}  (2)

If the formula of equation (2) were applied to the Example A givenabove, the discounted price P_(D) for the product P135 would be 2.94¢.

In the discounting techniques which have been described up to thispoint, qualification for discount pricing has depended upon acharacteristic of the transaction to which the discount pricing is to beapplied. However, the present invention contemplates using other typesof criteria to determine qualification for discounting. Such criteriamay include a customer's purchasing history or the purchasing history ofa group or “team” with which the customer is associated.

If purchasing history is to be used to determine eligibility fordiscounted prices, then it becomes desirable to maintain a transactiondatabase 90 of the type referred to in connection with FIG. 3. FIG. 15illustrates an example of a single transaction record 400 which isincluded in the transaction database 90. The fields included in thetransaction record 400 include a transaction identifier 402 (which maycomprise, for example, a string of alphanumeric digits that uniquelyidentify the transaction), a customer identifier 404 (which may comprisefor example, a string of alphanumeric digits that uniquely identify thecustomer or the team that the customer is associated with), an operatoridentifier 406 which identifies the check-out clerk who handled thetransaction, and a POS identifier 408 which identifies the POS terminal52 at which the transaction was processed. Additional fields in thetransaction record 400 include the purchase total for the transaction(field 410) and a field 412 which indicates the date and time at whichthe transaction occurred. The balance of the transaction record 400 ismade up of data entries 413 which identify the products purchased andthe price paid therefor. It is seen from FIG. 15 that each entry has adata element in a product identifier column 414 and another data elementin a price paid column 416.

Another component for a purchase-history-based discounting plan is thecustomer database component 92 shown in FIG. 3. FIG. 16A illustrates onesimplified example of such a customer database. FIG. 16A indicates thatthe customer database 92 is made up of data entries 500, each of whichincludes a respective data product in three columns, namely a customeridentifying code 502, customer name 504 and a column 506 which containsan indication of a discount pricing tier for which the customer hasqualified.

The manner in which a customer qualifies for a discount pricing tier maybe determined in a number of ways. For example, qualification for aparticular discount pricing tier may be based on the sum of purchasetotals spent by the customer during the previous calendar month.According to one example, customers whose sum of purchase totals isequal to or greater than $100 in the preceding calendar month would beeligible for the gold discount tier Customers who purchased at least $75during that period of time but less than $100 would qualify for thesilver tier, and those who purchased at least $50 but less than $75during that time period would qualify for the bronze tier. Customers whopurchased less than $50 during the qualifying period would pay theretail prices for the products purchased.

It should be understood that the qualifying period may be set to beshorter or longer than a month, that the qualifying amounts referred toabove can be varied in many ways, and that the time period need not betied to a calendar month or week, but could be rolling from day to dayso that, for example, the customer's qualification to receive discountedprices on a given day may depend on the quantity of purchases that he orshe made in the last 30 days, the last 7 days, or any other period oftime. The present invention also contemplates that, instead of basingdiscount qualification on the sum of purchase totals for a period oftime, the qualification could be based on the average value pertransaction during a given period. If a “rolling” qualification periodis used, the current transaction itself could be used to update thecustomer's purchasing history and to therefore grant or withholdqualification for a particular discount pricing tier on the basis of thecurrent transaction taken into consideration with previous transactions.Additional methods of updating and applying a discount that a customerqualifies for based on their purchasing history is disclosed inapplicant's co-pending U.S. Patent application entitled “METHOD ANDAPPARATUS FOR DETERMINING A PROGRESSIVE DISCOUNT FOR A CUSTOMER BASED ONTHE FREQUENCY OF THE CUSTOMER'S TRANSACTIONS”, U.S. application Ser. No.09/166,267, filed Oct. 5, 1998, which is incorporated by referenceherein as part of the present disclosure. U.S. application Ser. No.09/166,267 discloses, for example, conditions associated with a customerrating that corresponds to a discount that have to be satisfied, inorder for the customer to qualify for the discount. U.S. applicationSer. No. 09/166,267 further discloses methods of updating a discountthat a customer is entitled to based on their previous transactions (i)at the time of a transaction, or (ii) periodically; and methods ofupdating a discount that a customer is entitled to based on the productsincluded in the customer's transaction.

FIG. 16B presents an alternate format for a customer database 92. Thisformat includes an additional column 508 in which some details of thecustomer's purchasing history are presented. In the example shown inFIG. 1 6B, an entry for “average monthly purchase total” is shown incolumn 508. This figure could represent, for example, the monthlyaverage of purchases by the customer during the most recent threecalendar months.

As noted above, the discount pricing tier for which a customer qualifiesmay be determined on the basis of a purchasing history of a “team” (e.g.a group of customers) to which the customer belongs. To implement thistype of discounting plan, a team database 94 (FIG. 3) should also bemaintained in addition to a customer database 92. FIGS. 17A and 17Brespectively present simplified examples of formats for a team database94 and a customer database 92 to be used in connection with a teamshopping plan.

In the team database 94 shown in FIG. 17A, data products 520 each havetwo attributes, of which the first, corresponding to column 522, is anidentifier for the team, and the second, corresponding to column 524, isthe discount level for which the team qualifies. A method and apparatusfor managing a group reward program whereby a group of customers isregistered with a retail outlet as a shopping group is disclosed inapplicant's co-pending U.S. patent application entitled “POINT-OF-SALESYSTEM AND METHOD FOR THE MANAGEMENT OF GROUP REWARDS”, U.S. applicationSer. No. 09/118,414, filed Jul. 17, 1998, which is incorporated byreference herein as part of the present disclosure. U.S. applicationSer. No. 09/118,414 discloses a system that uses point-of-sale terminalsto monitor transactions processed according to a group reward program,wherein the system (i) stores a plurality of customer identifiers thatcorrespond to customers that register with the group reward program;(ii) assigns a group identifier to the group of customers; (iii) storesand applies reward rules that apply to the groups; (iv) tracks theperformance of the group as compared to the reward rules; (v) determineswhether the group is eligible for a reward (e.g. by performing aperiodic reconciliation process for each stored group identifier; and(vi) performs a redemption process of any rewards the group is eligiblefor. Examples of reward rules include a number of purchases to be madeby a group, a dollar value of purchases to be made by a group, a numberof purchases to be made by the group within a predetermined period oftime or before a predetermined date, specific products to be purchasedby the group, and a specific time or times during which purchases mustbe made by the group.

The customer database format shown in FIG. 17B is similar to that shownin FIG. 16A. In FIG. 17B the “pricing tier” column 506 of FIG. 16A isreplaced with a column 510 which consist of team identifying codes toindicate the team to which the customer belongs. It will be recognizedthat the data contained in the databases of FIGS. 17A and 17B can beprocessed to determine for each customer the discount pricing tier forwhich the customer qualifies.

FIG. 18 is a flowchart which illustrates a process carried out accordingto an embodiment of the invention in which customers qualify fordiscounted pricing based on their purchasing history. According to theprocess shown in FIG. 18, the POS terminal begins processing atransaction by first receiving data which identifies the customer (step540). For example, customers participating in the discount plan maycarry an identification card which includes a magnetic stripe or a barcode to indicate the customer's identification code. In such cases, step540 can be carried out by using a bar code reader or a magnetic stripereader to read the customer's identification card. As an alternative,the identification card may simply have printed thereon an ID code orthe customer's name, and the ID code or customer's name can then beentered into the POS terminal by using the keyboard The customer couldalso carry a “smart card” from which the POS terminal reads identifyinginformation by wireless communication.

Once the customer identifier has been entered, step 542 follows, inwhich the POS terminal retrieves from the server 54 the correspondingrecord for the customer which is maintained in the customer database 92.Next, at step 544, the POS terminal 52 and/or the server 54 extractsfrom the customer record the data in column 506 for that customer,namely data which indicates the pricing tier for which the customer isqualified.

The process of FIG. 18 then continues with a loop consisting of steps546 and 548 and a decision block 550. In this processing loop, theproducts to be purchased in the transaction are processed in a serialfashion. At step 546 the product identifier is entered by, for example,using a bar code reader to read a bar code on the product. Then, at step548, the corresponding price for the product, in the pricing tier forwhich the customer is qualified, is retrieved.

At decision block 550 it is determined whether another product is to beincluded in the transaction. If so, the process loops back to step 546.Otherwise, step 552 follows decision block 550. At step 552, the pricesdetermined for the products presented for purchase are totaled and othersteps required to complete the transaction are carried out.

To summarize the process illustrated in FIG. 18, the customer isidentified at the beginning of the transaction, his or her qualificationfor discount pricing is determined, and then each product purchased inthe transaction is priced according to the pricing tier for which thecustomer is qualified.

FIG. 19 illustrates a process carried out in accordance with theinvention to update a customer's purchasing history. For example, theprocess of FIG. 19 might be carried out as a batch process at the end ofeach week or month, depending on bow the discount plan operates. Theprocess is preferably performed by the central server 54 (FIG. 3) or byanother server (not shown) in communication with the central server 54.

Let it be assumed for the purposes of this example that the discountplan is based on the sum of purchase totals completed by the subjectcustomer during, for example, a calendar month. In that case, at the endof each month, the process of FIG. 19 would be carried out.

According to a first step (reference numeral 560) in FIG. 19, a customerrecord (i.e., one of the data entries 500 shown in FIG. 16A) isretrieved from the customer database 92 by the central server 54. Thecentral server 54 then retrieves from the transaction database 90 alltransaction records 400 (FIG. 15) for the customer which have a datesince the most recent updating of the customer database. In particular,the central server 54 extracts from the customer records the purchasetotals (product 410) for each of the transactions.

Referring once more to FIG. 19, the purchase totals for the retrievedtransactions are added together to establish the total amount spent bythe customer during the relevant period. Then, as indicated at step 566,it is determined on the basis of the total amount spent during theperiod, what discount pricing tier the customer is qualified for. On thebasis of this determination, the “pricing tier” entry for the customerin the customer database 92 is updated at step 568 by writing theappropriate indication into column 506 (see FIG. 16A). The centralserver 54 then retrieves the next customer's record from the customerdatabase 92 (step 570) and the loop which commences with step 562 isrepeated.

As an alternative to the batch-processing approach illustrated in FIG.19, the invention also contemplates that the customer database can beupdated in essentially “real time”, i.e., each time a transaction takesplace. A process which illustrates this alternative will now bedescribed with reference to FIG. 20. The customer is identified at thebeginning of the transaction when the customer identifier is received bythe POS terminal in step 580. The customer's record is retrieved fromthe customer database based on the retrieved customer identifier and thepricing tier for which the customer is qualified is retrieved from thatrecord in step 582. The product identifiers of the products included inthe present invention are received in step 584. In step 586 theappropriate prices for the received product identifiers are retrievedfrom the pricing database based on the pricing tier determined in step582, these prices are summed to determine the purchase total for thecurrent transaction.

For the purposes of the process illustrated in FIG. 20, it is assumedthat discount pricing tier qualification is based upon a customer'saverage purchase level during a predetermined period of time, such asthe last month. The last three steps of FIG. 20 indicate how the averagepurchase figure is updated based on the current transaction. In step 588the purchase totals of the customer's previous transactions in therelevant time period are retrieved from the customer's record of thetransaction database (based on the customer identifier). At step 590,the average purchase total stored in the customer's record (for example,as represented by field 508 in table 92 of FIG. 16B) of the customerdatabase is updated by summing the purchase totals of the transactionsretrieved in step 588 and the current transaction, and then dividing bythe number of transactions. The average purchase total is stored in thecustomer's record of the customer database and the discount pricing tierfor which the customer is qualified is determined on the basis of theupdated average purchase total and stored in the customer's record ofthe customer database in step 592. The process of updating thecustomer's average purchase total has been described as being initiatedupon the completion of a current transaction by the customer. It will beunderstood by those skilled in the art that such an update of theaverage purchase total can be performed via different methods, such ason a periodic basis (e.g. once a week). The process of updating acustomer's average purchase total may also be completed in a batchprocess such that all or some of the customer's records are processedessentially at the same time. It should also be understood that if theaverage purchase total is calculated for a predetermined length orperiod of time (e.g. monthly) then at the end of such a period of timethe average purchase total would be reset to a default value (e.g. zero)and the process started again for the new period (e.g. the next month).When the average purchase total is reset, the discount pricing tier thatthe customer is qualified for may be set to (i) the same discountpricing tier that the customer had been qualified for at the end of theprevious period of time, (ii) rest to a default discount pricing tier,or (iii) set to the retail pricing tier.

Up to this point, embodiments of the invention have mainly beendescribed in the context of a physical retail outlet (e.g. asupermarket). However, the practices of the present invention are alsoapplicable to a number of other types of retail outlets. For example,the teachings of the present invention could be advantageously appliedin the environment of a quick service restaurant; e.g., with the goal ofincreasing the average purchase per visit. According to one example, anoperator of a quick service restaurant may choose to define only asingle discount tier of prices, thereby assigning only a retail priceand a discounted price to each product. The quick service restaurantoperator may set a fairly low threshold purchase total for atransaction, say $10, for the discount pricing to apply. In such a case,the operator of the quick service restaurant might also find itadvantageous to display at the POS terminals the amount of an additionalpurchase that the customer needs to make in order to qualify fordiscount pricing. In this example, assume that the purchase totalthreshold to qualify for discount pricing is $10, and that the customerhas ordered a number of products whose retail prices sum up to apurchase total $9.50. The POS terminal can be programmed to displayinformation such as that shown in FIG. 21 to indicate that the customerneeds to spend another $0.50 to qualify for discount pricing. The POSterminal could further be programmed to determine an appropriate productto suggest to the customer and display the suggestion for the product inthe form of a prompt to the cashier operating the POS terminal. Thecashier operating the POS terminal could therefore suggest to thecustomer an additional product that could be purchased to reach thediscount pricing based on the displayed prompt.

The present invention also contemplates application of the multi-tierproduct pricing techniques disclosed above to retail outlets other thanretail stores. One type of retail outlet for which the practices of thepresent invention may be particularly advantageous is an Internetshopping sites. A particular application of the present invention to anInternet shopping site (which will be referred to as a Web site herein)will now be described with reference to FIGS. 22-25.

FIG. 22 is a highly schematic representation of the computer hardwareneeded to carry out this aspect of the invention. All of this hardwaremay be of conventional design. The hardware includes a Web servercomputer 600, which is connected to the Internet (represented byreference numeral 602) and is programmed to host a Web site. Inaddition, the Web server 600 is programmed to perform functions inaccordance with the present invention, as will be described below. It isalso contemplated that the Web server 600 would maintain a product andprice database. Of course, it is possible that the products availablefor purchase through the Web server 600 are different from the groceryproducts listed in the examples referred to above. The productsavailable for sale through the Web server 600 may be books, musicalrecordings, videos, clothing, computers and computer peripherals,services such as carpet cleaning, or any other type of product.

FIG. 22 also shows a customer device 604 connected to the Internet 602.The customer device may be any device that allows the customer to accessthe Web server via the Internet, such as a personal computer (PC),personal digital assistant (PDA), cellular phone, or pager. As will beunderstood by those who are familiar with operation of the Internet, thecustomer device 604, when connected via the Internet 602 to the Webserver 600, operates in a “client” mode to exchange data with the Webserver 600. Accordingly, the customer device 604 will sometimes bereferred to as a “client computer”. Although only one customer device604 is shown as being in communication with the Internet 602, it will beunderstood that any number of customer devices may be connected to theInternet and access the Web sewer 600. In addition, the Web server 600is likely to be arranged to serve a number of customer devices 604simultaneously so that more than one customer may place orders with theWeb server 600 at any given time.

Few details of the customer device 604 are shown in FIG. 22, but it isto be appreciated that in most cases the customer device 604 will haveall of the components usually found in a computer (e.g. processor,display component, input component, device drivers, communication port).For present purposes, only a display component 606 and an inputcomponent 608 (e.g. a keyboard and/or mouse are shown. The customerdevice 604 may also take the form of a so-called Web-access “appliance”,i.e., a device which can be attached to a television set to enable aviewer to navigate the Internet and to display downloaded information onthe television screen.

FIG. 23 is a flowchart which illustrates an example of a processperformed by the Web server 600 in accordance with an embodiment of theinvention. In the example illustrated by FIG. 23, it will be assumedthat the Web server 600 is hosting a Web site for selling bicyclingaccessories, and that the Web server stores a price database with onlytwo discount pricing tiers-retail prices and one tier of discountprices.

It should be noted that although the following processes are describedas being performed by the Web server 600, the processes may alternatelybe performed by one or more servers that are in communication with theWeb server 600 or by a combination of the Web server 600 and one or moreadditional servers.

According to an initial step 650 in FIG. 23, the Web server 600 receivesan 20 attempt by the customer device 604 to access the shopping Web sitehosted by the Web server 600. As is known to those who are skilled inthe art of the Internet, including users thereof, a customer may performthe access attempt using the customer device 604 by entering the Webaddress for the server 600 into the appropriate field of their browser,or by selecting a hyper-link for the shopping Web site.

When the Web server 600 detects the access attempt from the customerdevice 604, the Web server 600, in step 652, transmits to the customerdevice 604, via the Internet, information to be displayed on thecustomer device 604. One of the purposes of the information is to permitthe user of the customer device 604 to perform a shopping function. Anexample of the resulting screen display that may be provided on thedisplay component 606 of the customer device 604 is shown in FIG. 24.

Referring now to FIG. 24, except for the discount qualificationinformation which will be described below, the screen display shown inFIG. 24 may resemble conventional screen displays provided in responseto accessing a shopping Web site. The screen display of FIG. 24 includesan upper display section of the screen 624 which includes productlistings 626 and 628. The product listings 626 and 628 displayinformation on the products currently included in the customer's order.At the right-hand side of the upper display section 624 a scroll bar 630is provided to permit the customer to scroll upward or downward to viewadditional product listings or other information displayed on thescreen. Each of the product listings includes a product description 100,a product identifier 98, a retail price 108 and a discounted price 106.Those of ordinary skill in the art will recognize how the productlisting portions 626 and 628 of the screen display of FIG. 24 can begenerated from corresponding data entries in the price database referredto above.

Also included in the display section 624 is a “shop some more” button632 which may be actuated by the customer using a cursor (not shown) toindicate that the customer wishes to continue shopping (i.e. add moreproducts to his order). Although not shown in FIG. 24, it will beunderstood that images and additional description of the products mayalso be included in the display. Although only two product listings areshown in FIG. 24, it will be understood that the format of the screendisplay may be modified so that a larger number of product listings aredisplayed at a given time.

The screen display of FIG. 24 also includes a lower display section 640which includes a purchase total field 642 and a discount qualificationnotice 644. The purchase total field 642 indicates the total dollaramount of products that the customer has ordered during the session.FIG. 24 displays a purchase total of $55.38 (the sum of the retail priceof the products included in the customer's order plus an exemplary 6.5%sales tax).

The discount qualification notice 644 indicates to the customer thedollar amount of additional purchases that the customer needs to make inorder to qualify for discount pricing. For the purposes of this example,it is assumed that the purchase total required for discounted pricing is$60.00. Accordingly, the customer is informed via the discountqualification notice 644 that he or she needs to spend an additional$4.62 ($60.00−$55.38=$4.62) to qualify for discount pricing.

The lower display section 640 of the display also includes a “submitorder” button 646 that the customer may actuate to indicate that he orshe has completed selection of the products to be ordered and, forexample, is ready to provide payment information to the Web server 600.

Referring again to FIG. 23, a decision block 654 follows step 652. Atdecision block 654 it is determined whether a product has been selectedfor purchase by the customer operating the customer device 604. If so,the transaction information for the current transaction is transmittedfor display by the customer device 604 in step 656. Displaying thetransaction information may comprise, for example, retrieving theproduct identifier corresponding to the selected product from theproduct database and entering it into the product identifier field 98 ofthe display illustrated in FIG. 24 as well as adding a product listingsuch as the product listings 626 and 628 in FIG. 24 to the upper displaysection 624 (FIG. 20). As described above, the product listing mayinclude the selected product description, the retail price of theproduct, and the discount price of the product.

At step 658, the Web server 600 then generates an initial purchase totalfor the transaction based on the retail price for the product and anysales tax applicable. The process then continues to decision block 660,in which step the Web server 600 determines whether the transactionqualifies for discount pricing (e.g. it is determined whether theinitial purchase total is at least equal to a threshold purchase total).If the transaction does qualify for discount pricing, the processproceeds to step 662, wherein a purchase total is calculated for thetransaction using the discount price for the product included in thetransaction. Once the purchase total using the discount price iscalculated, the displayed transaction information is updated in step 664using the purchase total calculated in step 662. For example, thepurchase total calculated in step 662 is entered into the purchase totalfield 642 of the lower display section 640 (FIG. 24). In addition, thediscount qualification notice 644 may be updated to include a noticesuch as “Congratulations! You have qualified for discount pricing! Theorder total reflects the discount prices for the products you haveordered.”

If, in decision block 660, it is determined that the initial purchasetotal does not qualify for discount pricing, the process continues tostep 666. In step 666 the additional amount that the customer needs tospend in order to qualify for discount pricing is determined. Theadditional amount that the customer needs to spend may be determined,for example, by subtracting the purchase total from the thresholdpurchase total associated with discount pricing.

The process then continues to step 664, wherein the displayedtransaction information is updated. Updating the displayed transactioninformation in this case may comprise displaying the initial purchasetotal in the purchase total field 642 and displaying the additionalamount determined in step 666 in the discount qualification notice 644of the lower display section 640 (FIG. 24). The process continues fromstep 668 to step 670.

In step 670 it is determined whether the order has been submitted (e.g.it is determined whether the customer has indicated that he or she isfinished with the transaction by actuating the “submit order” button646). If the customer has submitted the current order the processcontinues to step 672, wherein the transaction processing is completed.Completing the transaction processing may comprise steps such asreceiving a payment identifier and shipping address from the customerand submitting the order for shipping to the customer. If, in decisionblock 670, it is determined that the customer has not submitted theorder (e.g. the customer has actuated the “shop some more” button 632 onthe upper display section 624 of FIG. 24) the process loops back to step654 and it is determined whether another product has been selected bythe customer and added to the current transaction. If there is anotherproduct selected by the customer, steps 656 through 670 are repeated totake into account the newly added product (e.g. an initial purchasetotal is calculated based on the retail price of the previously selectedproduct and the newly selected product)in addition to the previouslyselected product. It will also be understood that if a transactionqualifies for discount pricing based on a current purchase total,discount pricing will be applied to all subsequent products added to thetransaction.

Although the process of FIG. 23 was described with the assumption thatthere was only one discount pricing tier available, it is understoodthat a number of discount pricing tiers other than one may be provided.If multiple discount pricing tiers are utilized the process of FIG. 23may be slightly adjusted. For example, rather than determining whetherthe initial purchase total qualifies for a discount pricing, step 660may comprise determining whether the initial purchase total qualifiesfor any of the available discount tiers and, if so, which one.Additionally, multiple discount pricing tiers of discount prices can bestored in the price database, and displayed as part of the productlistings 626 and 628. In addition, the discount qualification notice 644would be augmented to indicate the various dollar amounts required toqualify for respective discount pricing tiers.

Furthermore, although the Internet shopping example described abovecalls for qualification for discount pricing based on the total amountordered in the transaction, it should be understood that the purchasinghistory discounting approaches described above in the retail storecontext can be adapted for use in an Internet shopping context. It isalso contemplated to base the discount pricing for the shopping Web siteon the number and of qualifying products purchased, as in the embodimentof FIG. 6C.

The embodiments of the invention portrayed in FIGS. 22-25 areparticularly attractive to a retailer which operates a shopping Website, because the discount qualification notice 644 in FIG. 24 is aconstant encouragement to the customer to keep the order transactionopen and to order additional products in order to reach the thresholdpurchase total in order to qualify for discount pricing. As a result,the discounting approach of this invention can help the retailer toincrease the average size of the orders received through the shoppingWeb site while maintaining margins that are typically sacrificed inprior art bulk discount programs.

The product discounting techniques of the present invention can also beapplied advantageously in the context of a telephone-order catalogoperation. FIGS. 25 and 26 illustrate an application of the invention inthis environment.

FIG. 25 schematically illustrates a catalog order-taking facility 700that is in communication with customer telephone devices 716 via apublic switched network 714. The facility 700 includes a central server702. The central server 702 may store a program and a database (notshown) that preferably includes at least the price database 86 and thecondition database 88 referred to above in connection with FIG. 3.

The facility 700 also includes a number of customer service stations706. At each station 706 there is provided a computer terminal 708 (oranother type of equipment that allows customer service personnel toaccess product information stored at the central server 702) and atelephone terminal 710 (or another type of equipment that allowscustomer service personnel to communicate with customers regarding theirorders). The computer terminals 708 are connected to the server 702 by adata network 712.

The telephone terminals 710 may comprise a “handset” telephone or aheadset device to be worn by the customer service personnel who work atthe customer service stations 706. The telephone terminals 710 areconnected to the public switched telephone network 714 to receivetelephone calls initiated from customer telephone devices 716. Inaccordance with conventional practice, customers may initiatecommunication with the catalog order-taking facility 700 by dialing atoll-free number.

For the purposes of this example, it will be assumed that the operatorof the facility 700 has printed and distributed catalogs advertising theproducts to be sold through the facility. Preferably the catalog listsfor each product to be sold both a retail price and at least oneadditional price which corresponds to a discount pricing tier.

FIG. 26 is a flowchart which illustrates a process carried out at theorder-taking facility 700 to process an order for products placed by acustomer via a telephone call (e.g. communications are exchanged betweenthe customer service representative and the customer via the telephoneterminal 710 and a customer telephone terminal 716). Although theexample provided in FIG. 26 contemplates only one discount pricing tier,it will be evident that the process of FIG. 26 can be adapted toaccommodate two or more discount pricing tiers.

In an initial step 740 shown in FIG. 26, a telephone call from acustomer operating a customer telephone device 716 is received by theorder-taking facility 700. The customer service representative operatinga customer service station 706 exchanges communications with thecustomer via the telephone connection and is informed by the customer ofa product which the customer wishes to order (step 742). The customerservice representative then enters a product identifier for the productby a conventional activity such as entering data via a keyboard (notshown) of the computer terminal 708 or selecting a product displayed onthe monitor (not shown) of the computer terminal 708 (step 744). Thecomputer terminal 708 or the central server 702 then calculates, in step746, an initial purchase total for the order transaction on the basis ofa retail price for the product. Once the initial purchase total iscalculated, it is determined whether the initial purchase total isgreater than or equal to the threshold purchase total associated with adiscount price tier (decision block 748). If the initial purchase totaldoes qualify the transaction for discount pricing (i.e. the initialpurchase total is greater than or equal to the threshold purchase total)the process proceeds to step 764, in which step the purchase total isrecalculated using the discount price for the product. If the initialpurchase total does not qualify the transaction for discount pricing,the process proceeds to step 750.

In step 750, the computer terminal 708 or the central server 702calculates a difference between the initial purchase total for thetransaction and a threshold purchase total required to qualify fordiscount pricing. The absolute value of this difference is theadditional amount that the customer needs to spend in order to qualifyfor discount pricing. The additional amount that the customer needs tospend in order to qualify for discount pricing is then displayed on themonitor (not shown) of the computer terminal 708 (step 752) so that thecustomer service representative can advise the customer of theadditional amount that the customer can spend in order to receivediscount pricing (step 754).

At this point, it is determined whether the customer wishes to orderanother product (decision block 756). The customer may, for example,inform the customer service representative of another product he or shewishes to purchase or the customer service representative may suggest aproduct to the customer and the customer may agree to purchase thesuggested product. For example, the central server 702 may determine anappropriate product to suggest to the customer based on, for example,(i) the initial purchase total, (ii) the product already included in thecustomer's order, (iii) the customer's previous purchases, or (iv) whatproducts the operator of the order-taking facility 700 wishes topromote. If it is determined in decision block 756 that the customerdoes not wish to add another product to the transaction, the processproceeds to step 772, at which step the transaction processing iscompleted. The completion of transaction processing may comprise, forexample, obtaining the payment information from a customer and theshipping address to which the current order should be shipped.

If it is determined in decision block 756 that another product is addedto the current transaction, the customer service representative againenters a product identifier (step 758) into the computer terminal 708and the computer terminal 708 or the server 702 recalculates thepurchase total for the transaction based on the retail prices for theproducts now included in the customer's order (step 760). It is thendetermined, indecision block 762, whether the purchase total for thetransaction is at least equal to the threshold purchase total requiredin order to qualify for discount pricing. If not, the process loops backto step 750.

If it is determined at decision block 762 that the discount pricingthreshold purchase total has been satisfied, then the purchase total forthe transaction is recalculated based on the discount prices for theordered products (step 764). In addition, of course, the customerservice representative may inform the customer that he or she hasqualified for discount pricing.

Following step 764 is a decision block 766, at which it is determinedwhether the customer wishes to order another product. If so, thecustomer service representative enters another product identifier (step768) into the computer terminal 708 and the purchase total for thetransaction is recalculated based on the discount price for the newlyadded product (step 770). Of course, if more than one discount pricingtier is available, the purchase total may be calculated based on theretail prices for each product after the addition of another product, adetermination made on which, if any, discount pricing tier thetransaction qualifies for based on the purchase total, and the purchasetotal may be recalculated based on the appropriate discount pricingtier. The process then loops back to decision block 766.

If at decision block 766 it is determined that the customer does notwish to order another product, the process advances to step 770. At thisstep the customer service representative obtains payment informationfrom the customer, such as a credit card number, and also is advised bythe customer as to where the order should be shipped. Further computerprocessing for order fulfillment and tendering of the credit cardpayment to a collecting financial institution is also carried out.

The process just described in connection with FIG. 22 may be based onoral communication between the customer and a customer servicerepresentative. However, it is also contemplated to adapt the process ofFIG. 26 for use in a catalog order-taking facility which employs anautomatic voice response system. In this case, some or all of thecustomer service stations 706 would be eliminated and telephone callsfrom customers would be routed to a voice response system (not shown)interfaced to the central server 702. The voice response system respondsto the telephone call and prompts the customer to enter productidentifiers through the keypad of the customer's telephone. The voiceresponse system confirms the ordered products and announces to thecustomer an additional amount or amounts for the customer to purchase toqualify for discount pricing. In the contemplation of the invention, anautomatic voice response system is to be considered the equivalent ofthe customer service stations.

Many variations of the discounting techniques of the present inventionhave been described above, but all share common advantages. The retaileris able to provide the customers with incentives to make more and/orlarger purchases, while setting discount prices for each product in away that preserves satisfactory profit margins. The retailer also enjoysmuch greater flexibility in setting discount prices than has beenavailable in conventional discounting plans.

Those skilled in the art will recognize that the method and apparatus ofthe present invention have many applications, and that the presentinvention is not limited to the representative examples disclosedherein. For example, rather than retrieving retail prices, thresholdpurchase totals, and discount prices from a database, such informationmay be stored directly on the products themselves, in the format of, forexample, a bar code or microprocessors affixed to each product.Moreover, the scope of the present invention covers conventionally knownvariations and modifications to the system components described herein,as would be known by those skilled in the art.

1-15. (canceled)
 16. A method of calculating a purchase total for atransaction, the method comprising the steps of: receiving a pluralityof product identifiers, each of the product identifiers representing arespective product to be purchased; determining whether the transactionsatisfies a qualification criterion; and on the basis of the determiningstep, selecting between a first procedure for calculating the purchasetotal for the transaction and a second procedure for calculating thepurchase total for the transaction, the first procedure includingtotaling respective first prices for each of the products to bepurchased, the second procedure including totaling respective secondprices for each of the products to be purchased, at least one of therespective second prices being lower than the corresponding first pricesfor the respective products to be purchased.
 17. The method of claim 16,wherein the qualification criterion is selected from the groupconsisting of: (a) a purchase total for the transaction calculatedaccording to the first procedure; (b) a purchase total for thetransaction calculated according to the second procedure; (c) a sum ofpurchase totals for at least one transaction made by a customer during afirst predetermined period of time, wherein the at least one transactionis made by the customer who is requesting the transaction for which thepurchase total is calculated; (d) an average of purchase totals for aplurality of transactions made by a customer who is requesting thetransaction during a second predetermined period of time; (e) a sum ofpurchase totals for a plurality of transactions made during a thirdpredetermined period of time by a group of customers, one of whom isrequesting the transaction; (f) an average of purchase totals for aplurality of transactions made during a fourth predetermined period oftime by a group of customers, one of whom is requesting the transaction;and (g) a total number of products having a particular brand among theproducts to be purchased represented by the received productidentifiers. 18-56. (canceled)